Volume 18 Edition 2

I am trying to see if anyone has any pull with the government so that we can put that ground hog out of service. Six more weeks of this cold is just too much for any of us to bear. I seriously think that our southern clients need to request a CAB training session and bring all of their underwriters and claims associates in for a nice weather meeting. We need it. Thankfully February is a short month and spring is on the way. This month we report:

CVSA – The Commercial Vehicle Safety Alliance released the results of its October 2014 Operation Safe Driver Campaign: Speeding and failure to use a seat belt topped the list of driver violations in commercial and passenger vehicles, with non-commercial motor vehicle drivers speeding more often. The top five warnings and citations issued to CMV drivers were: (1) speeding, (2) failure to use a safety belt, (3) failure to obey traffic control devices, (4) improper lane change, and (5) following too closely.

TRUCK FATALITIES – Large trucks traveled nearly 6 billion more miles on U.S. roads in 2013 than in 2012, and did so with greater safety results, according to American Trucking Associations’ calculations of federal data. ATA announced that truck-involved crash fatality rates declined 1.6%, to 1.441 per 100 million miles traveled in 2013 from 1.465 in 2012. The number of truck-miles traveled rose to 275 billion in 2013 from 269.2 billion in 2012 while the total number of fatalities in truck-involved crashes grew by 20 people to 3,964 in 2013. ATA also said the truck-involved injury rate decreased to 34.5 per 100 million miles traveled from 38.6. The large-truck fatality crash rate has fallen 39.2% since 2003 and the injury rate is down 34.2%.

CARGO THEFT – FreightWatch International’s Supply Chain Intelligence Center reports more than 40 thefts at truck stops and highway pull-offs at several locations in Arkansas early this month. In the incidents, along Interstate 40 between West Memphis and Forrest City, and along I-55 between West Memphis and Turrell, criminals used the “shopping” technique where they broke trailer seals then determined if the goods were of value. Stolen items include poultry and firearms.

TRANSPORTATION FORECAST – Transportation forecasting firm FTR reports that business conditions for trucking are on the upswing. Its Trucking Conditions Index for December increased 30% from November to a reading of 11.80, its highest level seen last year, as freight growth remained strong and contract rates continued to rise. FTR said it expects a modest relaxation of capacity constraints in 2015, along with a bounce back in diesel prices, to keep the modest increases moving forward. The FTR graph is available here.

WEST COAST LABOR DISPUTE – A tentative labor agreement has been reached for the 29 Pacific ports which have been impacted by the dispute. The Pacific Maritime Association and the International Longshore and Warehouse Union announced a proposed agreement on a five-year contract, but provided no details. Oakland officials said while full productivity is being restored, truckers likely will face periodic traffic build-ups at terminals. Cargo movement should improve soon in West Coast ports, but recovery from the backlog could take six to eight weeks. Trucking companies are expected to spend months clearing the cargo

ADVISORY COMMITTEE – The FMCSA announced the formation of a 26-member advisory committee that is tasked with updating classroom and new behind-the-wheel training requirements for professional truck and bus drivers. The Entry-Level Driver Training Advisory Committee comprises a diverse cross-section of motor carrier interests, including training organizations, the intercity bus and trucking industries, law enforcement, labor unions, and safety advocates but does not appear to include any insurance representatives. The MAP-21 transportation bill directed FMCSA to establish new minimum training requirements for individuals seeking to obtain an intrastate or interstate commercial driver’s license and become a professional truck or bus operator.

CRASH WEIGHTIING ANALYSIS – The FMCSA has extended the comment period on its analysis for an additional month. The study could impact the methodology employed by the agency for the Crash Indicator BASIC, one category of motor carrier data “scored” within its Compliance, Safety, Accountability (CSA) enforcement model. The study examines the feasibility of using a motor carrier’s role in crashes as an indicator of future crash risk. The original notice in January advised the public of the availability of the study report for review and comment, and requested feedback on what steps the agency should take regarding crash and Police Accident Report (PAR) data quality

WORK EXCUSES – Sometimes in doing the research for the Bits and Pieces we come across some of the strangest reports and once in a while we can’t help but put them in here for a bit of levity. Careerbuilder released a report on some of the more bizarre excuses for being late for work. Included in the top group? Have you ever tried?

I knocked myself out in the shower.

I was drunk and forgot which waffle house I parked my car next to.

I discovered my spouse was having an affair, so I followed him this morning to find out who he was having an affair with.

Someone robbed the gas station I was at, and I didn’t have enough gas to get to another station.

I had to wait for the judge to set my bail.

There was a stranger sleeping in my car.

A deer herd that was moving through town made me late.

I’m not late. I was thinking about work on the way in.

I dreamed that I got fired.

I went out to my car to drive to work, and the trunk had been stolen out of it. (In this case, the employee had the photo to prove it.)

CURRENT CASES

AUTO

The Court of Appeals in California reversed a lower court decision that allowed a motor carrier to delegate its obligation to safely operate a vehicle. An independent contractor who was injured when the tractor trailer rolled over was permitted to pursue the motor carrier as the Court concluded that the motor carrier retains ultimate responsibility for the operation of the vehicle. (Vargas v. FMI, Inc., 2015 WL 302755)

A contractor who hires trucking companies and pays them based upon the weight of goods hauled could potentially be responsible for an accident involving an overweight truck. The Court of Appeals in Louisiana held that there was a question of fact as to whether the actions of the contractor were a cause of the accident and denied summary judgment. (Wood v Lindsey, 2015 WL 392646)

Aiding and abetting is a cause of action not often seen in tort litigation. In the District Court in Nevada the Court allowed a trucking company to reopen discovery for the purpose of designating an expert to rebut the plaintiffs’ claim that the defendants aided and abetted each other in violating the FMCSA Safety regulations regarding fatigued driving. The Court also refused to permit the defendants from limiting the use of improperly disclosed drafts of discovery responses when there was a failure to properly object during the course of the litigation. (Terrrel v. Central Washington Asphalt, 2015 WL 461823)

In an interesting decision in the First Circuit, the Court held that it would evaluate the intent of the parties when determining a primary excess issue. The Court concluded that the evidence, including premium charges, supported a conclusion that the lessor’s policy was intended by all to be primary over the lessee’s policy. The Court went on to certify questions to the New Hampshire Supreme Court to determine whether an excess insurer had a duty to defend and, if so, when that duty would be triggered. (Old Republic Insurance Co. v Stratford Ins. Co., 2015 WL 310445)

Over in the Northern District of Oklahoma the Court held that a shipper could not be liable for negligent entrustment when it only entrusted the cargo and not the vehicle to the carrier. The Court also held that there was no claim for negligent hiring when the shipper was not the one who hired the actual carrier who transported the goods. (Hobbs v. Zhao, 2015 WL 427819)

A motor carrier’s delay of over two years before seeking relief of a default was too long. The Middle District of Pennsylvania held that the carrier was not going to be permitted to raise defenses at that late stage after discovery has gone on for years. In addition the carrier had failed to support any claim that it had a meritorious defense. (Doland v. New Penn Motor Express, Inc., 2015 WL 433598)

The Court of Appeals in Texas held that the owner of a crane which was being hauled by a trucker when it caused a train derailment was entitled to judgment in the action by the railroad for damages. The Court concluded that where there was no evidence that the owner had exercised any control over the manner and method of transport, or has actually hired the carrier, it bore no liability for the injuries. (Union Pacific Railroad Co v. Haynie, 2015 WL 2522890

Be careful of who you pay benefits to. The District Court in Oregon considered what happens under Oregon law when the plaintiff is awarded lost wages but the defendant first pays back the PIP insurer before paying plaintiff. The Court held that the plaintiff was entitled to collect attorney’s fees before money was paid back to the PIP insurer, denying the defendant a full credit for the monies paid to the insurer. (Powell v. System Transport, Inc. 2015 WL 364338)

For those of you familiar with the Sperl action involving broker liability you note here that it is still on going. The Appellate Court in Illinois considered whether the estates of two of the plaintiffs were entitled to seek part of the interpleader money filed by the trucker’s insurer. The initial argument of the insurer, that the claim for survival benefits would not stand because that claim had been vacated against the broker failed. The Court went on to hold that while there was a cause of action, the estates’ survival awards would not stand against the driver and motor carrier when the estates had not proven conscious pain and suffering at trial. (Carolina Cas. Ins. Co. v. Estate of Sperl, 2015 Il App (3d) 130294)

Punitive damages are not recoverable against a trucking company in Louisiana arising from an auto accident. The Eastern District in Louisiana held that punitive damages are permissible only when permitted by statute. A truck accident does not fall into the statutory class permitted to seek those damages. (Moore v. Wayne Smith Trucking, 2015 WL 471606)

Establishing the mandatory required limits for removal of a case to Federal Court is critical to keep the case in the Federal Court. The Middle District of Alabama remanded the trucker’s removal where the trucker failed to establish that the damages were more than $75,000. (Harris v. Aghababel, 2015 WL 350784)

CARGO

The Northern District of California held that negligence claims against brokers are not preempted by the Carmack Amendment. The Court also held that the question as to whether the defendant was acting as a carrier or as a broker remained to be resolved. The fact that much of the paperwork indicated that the defendant was a carrier resulted in the Court’s conclusion that there was amble evidence to require that the matter go to a jury. (Prussin v. Bekins Van Lines, 2015 WL 457470)

A broker’s request for an interlocutory appeal was denied in the Southern District in California. The broker sought to appeal the lower court decision that the Carmack Amendment did not preempt a claim against the broker for events which arose after the transportation was completed. (Anderson v. Mandana Pour, 2015 U.S. Dist. Lexis 7997)

Well what do you do now? A motor carrier took a preemptive strike and filed a declaratory judgment action against a broker in Pennsylvania seeking to limit its liability for a cargo loss which was pending in Florida. Over in Florida the broker filed a third party claim for indemnity against the motor carrier. Each party sought to dismiss the other action. They both won! The Florida Court dismissed the third party action concluding that the motor carrier had a right to its action when it filed first. The day before the Pennsylvania Court held that it would not exercise its option to hear the declaratory judgment. So both actions were dismissed. (Central Transport, LLC v. Mainfreight, 2015 US Dist. Lexis 17136; Tech Data Corp. v. Mainfreight, 2015 U.S. Dist, Lexis 17347)

A motor carrier’s reference to a rules tariff in a bill of lading, which did not indicate that it was incorporated into the terms and conditions of the contract of carriage, was insufficient to allow for the limitation of liability and indemnity provision contained therein being applicable to the loss. The Southern District of New York held that no reasonable jury would conclude that it was incorporated and that the carrier was required to make that clear by unmistakable language. (Chartis Seguros Mexico v. HLI Rail Rigging, 2015 WL 545565)

A motor carrier is permitted to require that cargo claims be arbitrated by placing the requirement in its tariff. In the Southern District of New York the Court held that when the motor carrier issued delivery receipts which incorporated the terms of the tariff the shipper was on notice of the requirement for arbitration and dismissed the action and required the parties to proceed to arbitration. (Affiliated FM Insurance Co. v. Bridge Terminal Transport Services 2015 WL 685244)